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INDIA-E  June 2002

INDIA-E June 2002

Subject:

India Network Economic News - June 20, 2002

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Thu, 20 Jun 2002 09:02:35 -0400

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India Network Economic News - June 20, 2002 Volume 14 Issue 112
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Today's News Items
------------------
#1. PMs 98 directive: Sebi, MoF & DCA doing the vanishing act?
#2. WTO: India draws flak for failing to pursue liberal policies
#3. Rupee strengthens further against $
#4. Tech stocks pull Sensex up, closes at 3,264.02
#5. Exchange rates
------------------------------------

#1. PMs 98 directive: Sebi, MoF & DCA doing the vanishing act?
In business by Olga Tellis

Theres a dangerous wind blowing from the east. Dangerous for officials of
the Securities and Exchange Board of India and the department of company
affairs. Investors are demanding punishment for officials of these
organisations who are in cahoots with the scamsters who are routinely
cheating them of thousands of rupees on an annual basis.

Mr Prakash Jaiswal, MP from UP and president of the Midas Touch Investors
Association who raised the issue of vanishing companies during the zero
hour in the Lok Sabha, wanted the fixing of accountability of the Sebi and
DCA officials by CBI in the vanishing companies matter.

He said that small investors have lost over Rs 10,000 crore in this scam
and expressed indignation at the governments indifferent attitude and lack
of credible action in the investigations being carried out, in spite of
his repeated requests and sustained follow-up.

Mr Jaiswal said that such scams cannot be prevented till action is taken
against the officials of SEBI and DCA who helped predatory promoters of
vanishing companies, which number 1,000, to raise money through public
issues and decamp with the money.

Though the government has admitted to him that they have identified 229
vanishing companies, its promoters and directors are roaming scot-free in
the country even today. These companies have also duped the banks and
financial institutions as they gave them loans of crores of rupees.

Interesting dates

* October 24, 1998: The Prime Minister directed the finance ministry to
take action within three months against unscrupulous promoters. But till
date not one unscrupulous promoter has been made to return the money.

* October 29, 1998: As a follow-up to PMs directive, Sebi directed stock
exchanges to probe IPO funds deployment.

*  November 30, 1998: The additional solicitor general informs the
Allahabad HC in a case filed by Midas, that DCA and Sebi officials have
met and a joint action plan is being formulated by them so that the
investors in companies which have vanished are not cheated.

* December 6, 1998: Capt Jagatvir Singh Drona, an MP from Kanpur, writes
to the PM, seeking fixing of responsibility and removal of  , then Sebi
chairman.

* February 1999: Midas moves application in HC for attachment of all
assets of those companies, their promoters and directors which have been
identified by the market regulator as vanished.


Sebis promises

* March 26, 1999: HC disposes of the Writ, (this was the first hearing
held after November 30,1998) as Sebi had filed a supplementary affidavit
giving details of action which the central government had initiated. A
co-ordination committee was proposed which was to be constituted of DCA
and Sebi officials. Secretary of DCA & chairman of Sebi would be its
co-chairman.

This was to be assisted by seven Task Forces to be constituted throughout
the country. These would identify the companies which have vanished and
suggest appropriate action to the monitoring committee.

Sebi and DCA would take action against the companies under their
respective statutes. Action against promoters and directors of such
companies under the penal code may also be initiated.

Further a group consisting of officials of the ministries of law and home
affairs, DCA, Sebi and RBI would be set up by the ministry of economic
affairs. This group would suggest legislative changes in various laws for
a statutory framework required for better protection of investors
interest.

* August 23, 1999: Sebi identifies 80 companies which have vanished.

Contempt of court

* February 17, 2000: Midas Touch files another writ in Allahabad High
Court, Lucknow Bench alleging that the respondents (Ministry of Finance,
Sebi and DCA) have failed to carry out the orders given by the court in
March, 1999 and they have done nothing to trace, recover the money and
protect the interest of shareholders of companies identified by them as
vanished.

The High Court admitted the writ, notices were issued to the respondents
to file their reply and also to indicate what action have been taken by
them against 80 Companies identified by them as vanishing. No reply to the
main petition has been filed yet by any of the respondent.

* July 17 & 18, 2000: Virendra Jain, Hon Secretary of Midas Touch meets
the law minister and the finance minister Ram Jethmalani and Yashwant
Sinha respectively, and demands promulgation of an ordinance for seizing
and attachment of assets of vanishing companies and their promoters, and
directors, who have been identified by the task forces.

* August 7, 2000: Sebi chairman informs Jaiswal that they have identified
167 companies so far.

* September 8, 2000: Securi-ties Appellate Tribunal gives landmark
judgement in Vanishing Companies: Rules that Sebi has the prime
responsibility & powers to check companies accounts, investigate and
conduct inquiries and take any measure required for protection of their
investors interest.

#2. WTO: India draws flak for failing to pursue liberal policies

From D Ravi Kanth
DH News Service
GENEVA, June 19

India came under sharp criticism at the World Trade Organisation (WTO) on
Wednesday over its failure to effectively enforce intellectual property
rights, for increased use of anti-dumping measures and growing non-tariff
barriers, and for failing to close the gap between applied and bound
tariffs to the WTO, according to key trade diplomats from industrialised
countries.

During Indias trade policy review, which began on Wednesday, Japan,
Canada, the United States, and the European Union among others expressed
concern over the pace of reform, the weak enforcement of intellectual
property laws, particularly the government's failure to curb the alleged
pirating of latest medicines and software, and also impediments that delay
the flow of direct foreign investments to India.

The trade policy review of India is taking place after a period of four
years as per the Marrakesh WTO agreement. Normally, the WTO prepares what
is called the Secretariat Report and India, the country now under
examination, presents its response and assessment on various trade issues.
Both these reports are made available to WTO members for discussion and
they are made public on Friday evening after the end of the meeting.
Commerce Secretary Deepak Chatterjee led the Indian delegation and is
understood to have presented a report on various reforms.

#3. Rupee strengthens further against $
PTI [ THURSDAY, JUNE 20, 2002  10:50:34 AM ]

MUMBAI: The rupee strengthened further against the greenback early on
Thursday, backed by strong exporter dollar sales following improved
sentiments due to receding war fears. Opening on a firm footing at
48.90/91 per dollar, the rupee hardened further to 48.89/90 in late
morning deals, sharply higher from the overnight finish of 48.9100/9150.

Healthy dollar supplies from export proceeds and inward remittances
ensured the rupee extend an earlier three session rally, as the outlook
for the currency remains positive, a forex dealer said. The rupee hit
two-month high on Wednesday, spurred by strong exporter dollar sales.

The rupee has been showing an upward bias against the dollar in recent
sessions, tracking other currencies that have risen against the US
greenback. In cross currency trades, the euro was quoted at 46.80/83,
pound sterling at 72.91/94 and Japanese yen (100) at 39.40/42.

#4. Tech stocks pull Sensex up, closes at 3,264.02

REUTERS [ THURSDAY, JUNE 20, 2002  5:45:28 PM ]

MUMBAI: Tech stocks rebounded on Thursday, helping the key index reverse a
two-day slide, but brokers said the undertone was weak due to huge foreign
fund sales and a gloomy outlook for the global tech sector. The Sensex
closed up 0.67 per cent at 3,264.02 points, after dropping 2.5 per cent in
the past two days.

There were three gainers for every two losers in brisk trade of 135
million shares, compared with Wednesday's 130 million. The broader
National exchange index closed up 0.67 per cent to 1,070.05 (provisional).

"It's a technical pull-back after two days of weakness," said Shankar V
Char, senior manager of institutional sales at Cholamandalam Securities.
"But unlike the steep fall, the uptrend was tentative and laboured."

Brokers said the market drew support from media reports that the
government will provide a guarantee of Rs 1000 crore to Unit Trust of
India, the nation's biggest fund manager, to help it meet redemptions in
three schemes maturing on June 30.

"That news brought some cheer to the market, which was reeling under UTI's
selling pressure," said a senior dealer with a foreign brokerage. Infosys
Technologies, the nation's No 2 software services exporter, gained 3.13
per cent to Rs 3,249.30, HCL Technologies, the No 5 exporter, advanced 2.4
per cent to Rs 208.95.

By Wednesday's close, the Infosys had shed 6.8 per cent in June, while HCL
lost 6.4 per cent. Some brokers said the news of Infosys acquiring a
banking product division of US-based IQ Financial Systems for $3.9 million
also supported the stock.

But underlying sentiment remains weak, with yet another global tech giant,
Nokia, on Thursday cut its sales target for the second half of the year.
On Wednesday, the tech-laced Nasdaq index sank about 3 per cent to an
eight-month low on dim forecasts from other tech giants like Apple
Computer, software giant Oracle and telecom equipment maker Ciena.


Blue Chips Down
Frontline stocks remained weak, however, with sentiment dampened by recent
foreign fund sales. Latest data released by the market regulator showed
foreign funds sold a net $61 million worth of Indian shares in four
straight days to Tuesday.

ITC, the nation's largest cigarette maker, eased 1.18 per cent to Rs
605.50, Ranbaxy Laboratories, the nation's top drug firm by sales, fell
1.54 per cent to Rs 874.95 and Cipla, the No 2 drugmaker by market share,
lost 2.56 per cent to Rs 926.90.

"On the one hand, we have foreign funds reducing their India weightings,
while domestic institutions are facing some sort of redemption pressures,"
Nilesh Shah, a fund manager at Kotak Securities. "Retail investors have
gone into value investing mode, looking for privatisation or restructuring
plays or cyclical opportunities."

Shah said the market would not be too perturbed even if there were drastic
changes in the federal cabinet, when an expected reshuffle was announced.
"As long as the momentum is sustained, it (the changes) should not be a
deterrent," Shah said. "What investors are looking for is continuity in
(economic) policies."

State-Run Cos

Some key state-run companies, which are not currently in the government's
privatisation list, rose on speculation they might soon become sell-off
candidates. State-run Mahanagar Telephone Nigam, a provider of fixed-line
and mobile phone services, rose 4.12 per cent to Rs 152.85 also on
speculation it might soon announce a liberal dividend.

Bharat Heavy Electricals, a power plant equipment maker, climbed 3.05 per
cent to Rs 175.80. State Bank of India, the nation's biggest commercial
bank, gained 1.53 per cent to Rs 242.40 after it said full-year net profit
jumped 52 per cent, meeting analysts' forecasts.

#5. Exchange rates
=========================================================
      Currencies                    Direct rates
                              TT Buying      TT Selling
=========================================================
Indicative rates in rupees a unit at 4 p.m. on June 19
U.S. Dollar                  48.72          49.03
Sterling                     72.78          73.28
Euro                         46.65          46.97
Singapore Dollar             27.29          27.48
Japan yen (per 100)          39.39          39.64
Swiss Franc                  31.64          31.84
Australian Dollar            27.63          27.82
New Zealand dollar           23.78          23.94
Hong Kong dollar              6.25           6.29
Malaysian Ringitt            12.82          12.90
Canadian dollar              31.61          31.83
Swedish Kroner                5.14           5.17
Kuwaiti Dinar               160.48         161.54
UAE dirham                   13.26          13.35
Bahrain Dinar               129.17         130.08
Qatary Riyal                 13.37          13.48
Saudi Riyal                  12.99          13.08
Omani Riyal                 126.22         127.68
=========================================================
Source: Indian Bank


------------------------------------------
End of India Network Economic News Digest
==========================================

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